Virginia hybrid vehicle $100 registration fee in transportation bill

RICHMOND, Va. (AP) - The state Senate passed a sweeping, long-term overhaul to Virginia's system for funding repairs and upkeep of its highways on Saturday, giving Republican Gov. Bob McDonnell a signature legislative triumph on an initiative that had eluded several of his predecessors.

The 25-15 vote ended a fractious 46-day General Assembly session, making McDonnell - who had vowed since his candidacy not to raise taxes - the owner of the largest tax increase bill to clear Virginia's tax-averse legislature since 2004. And it was the first overhaul of transportation funding since 1986.

It came on the final day of the 2013 session, the last over which McDonnell will hold office during the single, four-year term Virginia uniquely allows its governors. It was possible only with support from Democrats in both the Senate and House.

In the Senate, 12 of the 20 Republicans opposed the bill, while the support of 17 Senate Democrats assured passage in that chamber. In the House, Republicans were almost evenly split - 34 in support, 33 opposed - while 25 of the 32 House Democrats voted for it.

"This is a compromise bill. It had to be. Neither party controls Richmond outright," McDonnell said, acknowledging the bizarre partisan alignment in a celebratory statement after the Senate vote.

The measure of the reversed partisan polarity enveloping the bill found presumptive Democratic gubernatorial nominee Terry McAuliffe allied with McDonnell in support of it, while Republican Attorney General Ken Cuccinelli, unopposed for his party's gubernatorial nomination, opposed it.

The bill would replace Virginia's 17 ½ cents-per-gallon retail gasoline tax with a 3.5 percent wholesale tax on gasoline and a 6 percent levy on diesel fuel. It boosts statewide sales taxes from 5 percent to 5.3 percent. It increases the titling tax on car sales and adds a $100 registration fee for fuel-sipping hybrid vehicles. It also rules out proposed tolls on Interstate 95 south of Petersburg.

Altogether, it would generate new statewide revenue totaling $880 million annually for the state's 58,000-mile network of roads when fully phased in within four years. It could provide hundreds of millions more, provided localities in Virginia's most critically gridlocked regions of northern Virginia and Hampton Roads adopt elective regional tax increases.

Most of the no votes came from anti-tax conservatives.

"In a time when your dollar is not going as far as it once did, in a time when unemployment is higher than we would like it to be, the General Assembly is saying, 'Well, you make out the best way you can, but we're going to take a bigger chunk of your wages," said Sen. Ralph Smith, R-Roanoke County.

But some Democrats took aim at it, too, including Sen. J. Chapman Petersen, who called it "overly complex and, in places, contradictory. I feel like it makes arbitrary distinctions between petroleum and diesel, between inefficient vehicles and efficient vehicles that, frankly, have no logical basis."

Aside from the $100 annual hybrid penalty, diesel fuel will be taxed at nearly double the gasoline rate.

Fellow Democratic Sen. Adam Ebbin of Alexandria also scored the bill, saying it "represents bad economics and bad transportation policy" for weakening the link between fuel and highway use and revenue, and for moving part of the burden to the general retail sales tax on all merchandise except for groceries and medicine.

"That's what we should be doing to fund transportation - raising our gas tax. This bill hurts people who can least afford it. Virginians should not be forced to pay a higher tax for the clothes on their backs than they pay at the gas pump," Ebbin said.

One conservative Republican, however, overcame his aversion to taxes, saying his poor, rural region in southwestern Virginia would benefit more than it has in years.

"Do I agree with the (tax) increases that are in there? Probably not all of them. Do I feel it's perfect? I don't feel it's perfect, but do I feel that I could have done better? No," said Sen. Charles W. "Bill" Carrico of Grayson County.

The bill passed after a series of harrowing turns over its final 24 hours.

Democrats balked Friday after McDonnell had admonished lawmakers not to push for Medicaid expansion without deep cost-cutting and efficiency reforms first. After House and Senate negotiators agreed to form a legislative commission to oversee the reforms, McDonnell expressed his conditional support in a letter Friday night that satisfied Democrats.

But an overnight ruling by conservative Attorney General Ken Cuccinelli that the commission is unconstitutional angered the Democrats anew and threatened to doom the bill before House and Senate leaders edited the provision to make Cuccinelli's ruling moot.